Chronic Poverty in Rural India, An Analysis using Panel Data: Issues and Findings

Contents

Abstract

The distinction between chronic or extended duration poverty and
transient poverty is rarely made in the substantial literature on
poverty in India. Determination of poverty as chronic or temporary
requires that the same households be tracked over time through a panel
data set and/or use of life or event history and other qualitative
approaches. This paper reviews the limited panel data based literature
on chronic poverty in India and a subset of the literature on other
countries. It then uses panel data that longitudinally track 3,139
households in rural India to try to identify and understand the factors
that influenced or constrained changes in poverty status over time.

The paper analyses the impact of selected variables at the household,
village and district level on poverty incidence at each of the two
points of time. It tries to identify the characteristics of households
that exhibit mobility into and out of poverty and of those that simply
stay poor. It also tries to understand the policy implications arising
out of differences in the importance of various factors in influencing
chronic poverty and exit from it.

In the next section of the paper, we present a review of some of the
panel data based literature on chronic poverty. In section III, we
outline the approach we have taken to the analysis in this study.
Section IV presents the results of analysis and section V concludes the
paper.

Citation

Chronic Poverty in Rural India, An Analysis using Panel Data: Issues andFindings presented at Staying Poor: Chronic Poverty and Development Policy, Institute for Development Policy and Management, University of Manchester, 7-9 April 2003. Chronic Poverty Research Centre (CPRC), Manchester, UK, 29 pp.